Appleby

You probably already know this, but just in case--- Once the company has common law employees that are eligible to participant in the plan, the employer is no longer eligible for a Solo-k plan. As such, the plan has to be amended under a regular 401(k) adoption agreement & plan document.

But it was- in part. It says in part " See bolded text.

Thank you

What's an EOB?

Actually, by her 2018 tax filing due date, plus extensions ( as a return of excess)

Also, this would not be a rollover, as US retirement accounts can be rolled over only to other US retirement accounts. On the US side, this would be just a regular distribution.

For any year that you maintain both the SEP IRA and the 401(k), make sure you are not using the IRS Model Form 5305-SEP ., as you are not eligible to use that form while maintaining another retirement plan for your business. In such cases, you would need to use a Prototype or individually designed SEP agreement , that allows you to maintain both a the same time.

Placing a dime on that bet , because I agree- ( hope that is not ? )

Hi Austin, Was it reported on the client's tax return as a nontaxable direct rollover? Does Box 2a of the 1099-R show zero? Was a note included with the tax return explaining the rollover? If yes to all of those, then there should be no issue. If no to any one of those, that could be the issue.

Hi Larry, I like your answer- but only if the trust was a designated beneficiary of the IRA. In this case, the IRA has no designated beneficiary, because the estate was the beneficiary at the time of death. Therefore, the distributions must be made under the 5-year rule if death occurred before the RBD, or over the decedent's remaining life expectancy if death occurred on/after the RBD. The beneficiaries of the trust are not eligible to be 'designated beneficiaries '.

If she worked in the US, then she should have a SS# or other identifying number. Many financial institutions will open an account for her- maybe the one with which she currently has the 401(k) would be the easiest ( some push back on non US citizens who are not US residents).

It appears that this plan is under a prototype, for which the custodian is responsible for some defer o record-keeping? Otherwise, it would (should ) not matter to them. I recommend escalating the call. Roth 401(k) accounts are required to be maintained separately from other 401(k) assets. The receiving custodian is required to maintain that separate accounting. Is it possible that: They think this is a 'Roth IRA conversion", or Their plan does not permit designated Roth accounts? If number 1, then the issue can be resolved by helping the new custodian to understand the rules. If number 2, then they are unable to accept the transfer, unless the plan is amended to permit designated Roth account contributions.

Don't forget that the 60-day deadline is extended , under the self-certification procedure provision - see Rev. Proc. 20 16- 47

Agreed !

That is my understanding. I know IRS Pubs are not authoritative, but...I am going to refer to IRS Pub 571 anyway. Under the chapter on "Limitations on Annual Additions", it says " More than one 403(b) account. If you contributed to more than one 403(b) account, you must combine the contributions made to all 403(b) accounts maintained by your employer. If you participate in more than one 403(b) plan maintained by different employers, you don’t need to aggregate for annual addition limits. "- 2017 Edition. 403(b)s multiple Pub 571.pdf

The 'one rollover per 12 month period' applies only to rollovers between IRAs ( IRA to IRA).

Yes

To add...the FIdelity 1099-Rs should be for the 401(k) account...not for the Fidelity IRA.

I agree with Bird. The 1099-R from Schwab should show the amount as a nontaxable distribution, if done properly and timely ( Code P or 8 in Box 7, to let the IRS and other interested parties know that it is a correction of an excess contribution. If there were net attributable income (NIA) earnings, only that amount would be taxable.

This should not be hard to fix. The financial institution needs to either (1) issue a corrected 1099-R, reporting the amount to the participant who received the distribution, or (2) issue a corrected 1099-R for zero - in which case the plan trustee/administrator would need to issue the 1099-R to the participant. Going forward, if the plan administrator wants the financial institution to report distributions to the participants, the financial institution's applicable operational procedures need to be followed ,

But...that is more than 100 percent of compensation. Doesn't that violate 415©

Nonspouse beneficiaries cannot rollover assets into a qualified plan. Only a spouse beneficiary can, and in those cases, it would be to the spouse's own account under a plan where he/she is a participant. ( I hope I understood the question. If not, please let me know)

Agree with Lou S.

I would have them make the adjustment. Otherwise, the client may receive a 5498 with incorrect information, which could create complications with the IRS

...just saw this- result from a Google search for something else. I know this response is too late, but I wanted to add my two-cents anyway. There is another rule to consider here- banking laws. A financial institution should not deposit a check to an account for one party, when the check belongs to another party. Which is why, if someone makes a check payable to my business, I am not allowed to deposit that check to my personal account ( except in the case of a DBA and such). The custodian is required to make the adjustment by reversing the amount from the regular checking account and depositing the amount to the IRA. Even if the funds are no longer there , the book entries can be made , so that the required 5498 can be generated for the rollover, and 1099-Rs issued for any distributions. The plan administrator should not make any adjustments- they did everything right.